International Journal of Energy and Environmental Research Vol.3, No.3, pp.1-20, September 2015 Published by European Centre for Research Training and Development UK (www.eajournals.org) 1 ISSN 2055-0197(Print), ISSN 2055-0200(Online) PROJECT FAILURE AS A REOCCURRING ISSUE IN DEVELOPING COUNTRIES: FOCUS ON ANAMBRA STATE, SOUTH EAST NIGERIA. Nzekwe, Justina U. Oladejo, Esther I. (Ph.D) Emoh, Fidelis I. (Ph.D) ABSTRACT: Project failure has become a recurrent feature of construction projects in developing countries as revealed by research works. This manifests not only as abandonment of projects, but in the form of structural defaults leading to structural collapse, prolonged projects delivery time, cost overshoots and client dissatisfaction. The aim of this research therefore was to critically analyse the factors that may lead to project failure in Anambra State, South East, Nigeria, with a view to ameliorating the high level of project failure. Primary information used in the research were sourced from a survey of one hundred (100) project professionals, with a minimum of 5 years of experience. Structured questionnaires based on the Likert-5-Point Scale of Responses were used to capture their opinions on the reasons for project failure, while Secondary information were sourced from review of literature. Results were analyzed using appropriate statistical tools based on the Statistical Package for Social Sciences (version 16.0). Our results show that indeed, the rate of failure of projects is high (p = 0.000). We have established and firmly ranked the first five factors responsible for project failure in Anambra State, South East, and Nigeria. The researchers concludes that the most important factor for project failure is increase in the price of starting materials. It is recommended that the results presented in this research be widely disseminated and used in community enlightenment, and in further policy guidance and regulation. It is also recommended that the study be applied to the entire South East, Nigeria in order to generate better client satisfaction in subsequent projects. KEYWORDS: Project Failure, Developing Countries, South East Nigeria. INTRODUCTION Background of the Study The Nigerian construction project industry in particular is dotted with too many cases of failed, abandoned or uncompleted projects. These include both publicly-owned facilities and private projects. Project failure manifests as inability to deliver a project to time, cost and quality specifications, or inability to satisfy consumer expectations (Amachree, 1988). Going by this definition, it may be observed that few projects in Nigeria go to completion on time, and few also utilize the amount initially budgeted for them. More often than not, the projects drag on for years and in some instances, they become functionally obsolete on completion. This is because times are changing fast, and new innovations driving the way things are done are being introduced every
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International Journal of Energy and Environmental Research
Vol.3, No.3, pp.1-20, September 2015
Published by European Centre for Research Training and Development UK (www.eajournals.org)
1 ISSN 2055-0197(Print), ISSN 2055-0200(Online)
PROJECT FAILURE AS A REOCCURRING ISSUE IN DEVELOPING
COUNTRIES: FOCUS ON ANAMBRA STATE, SOUTH EAST NIGERIA.
Nzekwe, Justina U.
Oladejo, Esther I. (Ph.D)
Emoh, Fidelis I. (Ph.D)
ABSTRACT: Project failure has become a recurrent feature of construction projects in
developing countries as revealed by research works. This manifests not only as abandonment
of projects, but in the form of structural defaults leading to structural collapse, prolonged
projects delivery time, cost overshoots and client dissatisfaction. The aim of this research
therefore was to critically analyse the factors that may lead to project failure in Anambra
State, South East, Nigeria, with a view to ameliorating the high level of project failure.
Primary information used in the research were sourced from a survey of one hundred (100)
project professionals, with a minimum of 5 years of experience. Structured questionnaires
based on the Likert-5-Point Scale of Responses were used to capture their opinions on the reasons
for project failure, while Secondary information were sourced from review of literature. Results
were analyzed using appropriate statistical tools based on the Statistical Package for Social
Sciences (version 16.0). Our results show that indeed, the rate of failure of projects is high (p =
0.000). We have established and firmly ranked the first five factors responsible for project failure
in Anambra State, South East, and Nigeria. The researchers concludes that the most important
factor for project failure is increase in the price of starting materials. It is recommended that the
results presented in this research be widely disseminated and used in community enlightenment,
and in further policy guidance and regulation. It is also recommended that the study be applied to
the entire South East, Nigeria in order to generate better client satisfaction in subsequent projects.
KEYWORDS: Project Failure, Developing Countries, South East Nigeria.
INTRODUCTION
Background of the Study
The Nigerian construction project industry in particular is dotted with too many cases of failed,
abandoned or uncompleted projects. These include both publicly-owned facilities and private
projects. Project failure manifests as inability to deliver a project to time, cost and quality
specifications, or inability to satisfy consumer expectations (Amachree, 1988). Going by this
definition, it may be observed that few projects in Nigeria go to completion on time, and few also
utilize the amount initially budgeted for them. More often than not, the projects drag on for years
and in some instances, they become functionally obsolete on completion. This is because times are
changing fast, and new innovations driving the way things are done are being introduced every
International Journal of Energy and Environmental Research
Vol.3, No.3, pp.1-20, September 2015
Published by European Centre for Research Training and Development UK (www.eajournals.org)
2 ISSN 2055-0197(Print), ISSN 2055-0200(Online)
day. A typical example is the Ajaokuta Steels Project. The amount of money invested so far runs
into billions of naira yet, because it has dragged on for years, the project has no prospects of
ensuring steel production at a competitive rate. This is because parts installed initially in the early
stages of the project have become obsolete and cannot guarantee steel production at a competitive
rate. The waste occasioned by this project is monumental, because the money could have been
channeled into other needed priority projects like equipment of Universities, or maintenance of
roads.
The failure of projects from a cost perspective is a worrisome trend in the construction industry in
Nigeria. Whereas in many cases, project cost variation is inevitable because of inflation and other
unforeseen events, more often than not, poor project conception and design by themselves make it
impossible to make credible estimates of the costs of materials and of the project itself. This trend
has become a handy excuse for corrupt contractors and administrators who resort to varying the
cost of ongoing projects in order to make money from the situation. Sometimes, the ultimate cost
of the project after all the variations done is several magnitudes higher than the projected cost at
the start. This is wrong and points at the inability of governments and project owners to engage
the services of professional project managers to oversee ongoing projects. In fact, technical
competence in architecture, or building, civil engineering or management alone cannot qualify one
as a professional project manager without the requisite training.
The inability to complete projects on schedule or to cost projections has sometimes led to total
project abandonment. This has been encountered in road construction projects, where initial
excavation and grading work can worsen the state of pre-existing roads, only for the project to be
abandoned for one reason or other. This has created untold hardship in many rural and urban road
construction projects, because such roads serve entire communities and could affect their economic
fortunes. In other instances, public building projects of a crucial nature such as proposed hospital
projects could drag on for years, even while the populace battles epidemics.
The question then is, “why are more and more projects failing?” And, what can the project manager
do about the menace? The reasons for failure are numerous. They could range from technical
problems associated with poor project conceptualization and design, to economic problem
associated with their implementation. Others include political, environmental, cultural factors, etc.
As credible and unpredictable as these reasons are, the truth is that professional project
management can go a long way in envisaging the barriers to project success and curtailing them.
Above that, professional project management can ensure that all relevant factors needed for
successful project implementation are identified, factored in, and harnessed, in order to ensure
successful delivery.
The ability of projects to deliver value to customers or users on completion is another crucial
measure of importance and in many cases, this condition is not met. There are several cases of
white elephant projects embarked upon by the government that have little inherent value, even
after gulping billions of naira. This means that, in order to be seen as performing, a project must
be conceptualized to address a specific desired and justifiable purpose, which ranks very well on
the scale of importance and priorities. For instance, in most resource-poor settings with no
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infrastructural provisions, there is hardly any justification to embark on a project for an amusement
park, when there is no provision for pipe borne water, or electricity, or good roads. The
conceptualization is therefore very important, because once it is poorly done, there is a wider room
for abandonment, in that incoming administrations may fault it and starve it of funds.
The design of a project is also very important, and is intimately linked to the conceptualization of
its very idea. Poor design eliminates the possibility of deriving maximum value from the project,
because functionality is lost. Poor design could lead to early dilapidation and short utility life.
Sometimes, structural collapse may occur. This has happened in many residential building projects
all over Nigeria, and has led to high casualty figures. In other countries such as China, cases of
bridges collapsing in the course of construction have been recorded, leading to very high fatalities.
Of late in Nigeria, there has been a move to regulate the standards of building materials more
stringently, as the poor qualities of such building materials have been adduced as a reason for the
high rate of collapse ,fires and dilapidation, etc.
Statement of Problem According to Nwachukwu, et al. ((2010), the rate at which infrastructure construction projects fail,
or are abandoned, some even under construction, is retrogressive in most developing economies.
So one understands why it is a problem in Anambra State, South East Nigeria. Besides the very
high numbers of abandoned projects defacing the landscape, of recent, a high rate of collapse of
privately-owned building projects has been recorded, with the attendant fatalities. In June, 2012, a
building collapsed at Ifite, near Awka, claiming two fatalities with a number of other injured
persons (Ujumadu, 2012). Very recently, in September 2014, another storey building collapsed at
Adazi-Ani, killing one and injuring over 200 persons (Ameh, 2014). It is appalling that this can be
happening when we have not been attacked by some natural disasters such as tsunamis and
earthquakes, which test the strength of even the strongest buildings. The problems posed by failed
projects are not limited to private buildings. In fact, some glaring cases of public buildings such
as the Federal Secretariat Project, buttress this point. The rate of Project failure is indeed alarming.
Projects of moderate scale go on for a long time and this has created skepticism in the population
about the sincerity of governments to complete any projects embarked upon on schedule.
Sometimes, communities make projections about the likelihood of early completion or not, or even
outright abandonment, judging solely by the reputation of the contractor handling the work. Even
more worrisome is the prevalence of abandoned projects, mostly private properties, due to one
reason or another.
Aim and Objectives of the Study The aim of this research is to critically analyse the factors responsible for project faiure in Anambra
State, South East, Nigeria .
Objectives of the Research include:
To find out if indeed high rate of project failure is a problem in Anambra State, South East,
Nigeria.
To determine the factors responsible for project failure their contributions.
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To find out if the award of contract without reference to availability of fund is the major
reason for project failure in Anambra State
Research Questions
There are certain research questions that need be answered in the course of this research, These
include:
Is high rate of project failure a problem in Anambra State, South East, Nigeria ?
What are the factors responsible for project failure in the case study?
Is award of contract without reference to availability of fund the major reason for project
failure?
Significance of the Study
The can bring to the lime light strategies which can be successfully applied to boost project
delivery in Nigeria. This can go a long way in informing policy development on the subject matter,
and can provide project guidance to professionals involved in construction projects in Nigeria,
from design to implementation. It can also establish a clear need for professional project managers
in Nigerian construction enterprises. Because of paucity of literature on project management
principles and practices in Nigeria, it is hoped that empirical studies such as this can help enrich
the indigenous literature on the concept.
REVIEW OF RELATED LITERATURE
Concept of Project and Project Management
By definition, a project can be considered to be a series of coordinated activities and tasks
embarked upon by organizations, with clearly defined objectives, commencement date, duration,
requirements for resources and also funding limits. A project is delivered to quality and time and
cost specifications and in order to realize them, proper organization of resources is crucial
(Nwankwo, 2006). This need for proper organization of resources informs the concept of project
management. Project organization therefore is referred to by Benjamin (2001) as the “overall
design and structure of the body of entity that would undertake the task of project execution” By
this definition there is no disparity between project organization design and organization
design/instruction. Project management has been defined as “managing and directing time,
materials and costs to complete a particular project in an orderly and economical manner, so as
to meet established objectives in time, budgeted amount and to achieve technical results”
(Ntamere, 1995). It can also be defined as planning, directing, organizing and managing of a
company’s resources for a relatively short-term objective.
Project management is believed to be justified as a means of avoiding the ills inherent in the
construction and production sectors of the economy and for which reasons most projects fail and
or are abandoned (Nwachukwu & Emoh, 2011). Project management is concerned with
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“implementation of strategy”. “Strategy” is an old word concerned with a plan of action geared
towards achievement of a particular goal (Ghemawat, 2002). Modern project management, which
is not the same as Strategic is a means to adapt for change and be a tool for strategy
implementation. Project management is most crucial to the development of businesses and
enterprises, in which it offers a platform for harnessing and integrating the various components of
resources, labor, and communication towards project success. It evolved from the need for
management to stay informed about all aspects of an organization’s activities asnd commitments
given the complexity of the organizational structure. It is dynamic as it can change its composition
to suit the need of the project wherever necessary.
The project manager should be informed about the general principles of management. He also
needs to understand how the various principles are inter-related, and how they work together to
achieve organizational goals. He needs to understand how the various participants operate and
appreciate their individual skills and peculiarities and work pattern and also weaknesses. This
demands that he should be very knowledgeable and with a good deal of experience.
His task is to obtain results from the integrated effort of many functions and sub-functions, through
planning and within the limits of available resources. He also maintains regular communication
with executive management and administration regarding the status and progress of ongoing
projects. He is the leader of the project team and his job consists in directing members of the
project team. He negotiates for the resources needed for the project and should be able to resolve
any conflicts deriving from the utilization of those resources. The roles of the project manager can
be summarized thus:
THE ROLE OF THE PROJECT MANAGER
1. He manages and coordinates the initiatives needed to enhance the organization’s systems
and processes.
2. He provides informed strategic advice on project design and implementation for effective
analysis.
3. He is involved in the development and implementation of short and long term goals,
objectives and procedures.
4. He is involved in the development of project plans, work schedules and cost estimates for
long-term projects produces and manages annual budgets.
5.He represents the project in Institutional matters and also externally.
6.He communicates with executive management regarding the status of current project initiatives,
and seeks and obtains executive guidance and approval as needed.
Though not very different from the forgoing, Samaras and Yensuang (1989) summarized the
functions of a project Manager thus:
1) Establishment of project objectives
2) Definition of tasks and subtasks needed for goal implementation
3) Setting of milestone
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4) Allocation of resources
5) Assignment of responsibility
The project manager also performs other duties as assigned to him, and assembles the members of
the project team for periodic review. The project manager is different from top management
officials and is the professional who is able to plan, direct and control organizational resources
towards successful project implementation. Each project has its unique nature, and so project
management tries to accommodate each project’s peculiarity in order to achieve project-specific
goals and objectives. This implies a great deal of flexibility. This call for flexibility is actually one
of the reasons management executives must delegate the core tasks of project management to a
project manager who is responsible for the day-to-day implementation of the project.
The flexibility of a project manager entails a capability to foresee a change in project requirements,
since we live in a constantly changing environment. According to Neal (1995),
Because projects can be very complicated in nature, their implementation involves a myriad of
non-structured undertakings, in order to complete them on time and meet cost and performance
specifications. A project manager may be added to every project, but he must work in the context
of general organizational goals, and be able to carry out the needed multi-disciplinary coordination.
A project manager is very crucial to the survival of organizations and projects and can be the
difference between a successful project and a failed one, because 'whatever the size of a project
and how properly the project is planned, proper management guarantees the success of the project
(Ndionu, 1994).
FACTORS AFFECTING PROJECT IMPLEMENTATION
There are several factors affecting project implementation process and these have been discussed
from different perspectives by different authors. Metzger (1983) listed problems mostly
encountered as: Poor planning, undefined contract, unstable problem definition, inexperienced
management, political pressure, ineffective change control and unrealistic deadline. In the views
of this author, the successful project implementation may depend to an extent on careful regulation
of the factors as stated below:
1. Insufficient capital
2. Inflation
3. Poor planning
4. Political pressures and Government Bureaucracy
5. Contractor competence and organization
6. Variation of project scope and design
7. Changes in consultancy service providers
8. Change in the original design
9. Business/Geographical environment
10. Project complexity
There is a tendency for successive governments to discontinue projects initiated by their
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predecessors (Fubera, 1985). Rather than do this, the new regimes prefer to start their own projects
altogether. A major reason for this is that many contracts are awarded to serve political purposes
and so continue to be credited to the regime that awarded it, even if they did not complete it. Again,
because many contracts are actually inflated, rather than continue to fund ongoing projects,
successive governments tend to use this knowledge to discredit past governments in order to score
political points. This has led to a dive in confidence in the public sector, such that funding partners
approach long term public sector projects with a lot of caution. (Nwachukwu, 1988). This
greatly erodes the operation of public-private funding partnerships.
Sometimes, this lack of continuity derives from more sincere reasons like inflation, which affects
the cost of raw materials and changes the amount of money required to complete a project by many
orders of magnitude. For projects which have been going on for a long time, several cost variations
may be occasioned by this, which greatly increases the temptation to abandon them.
PROJECT FAILURE
The inability of many projects to generally satisfy the desires and aspirations of the end user is
also an instance of failure (Nwachukwu & Nzotta 2010). A project, irrespective of completion time
or cost fitting is indeed a failed one if it does not justify its cost and the value derivable from its
use. This refers to a case of a white elephant project. In a study (Baker, Fisher & Murphy, 2010)
to gauge the value of customer satisfaction as a measure of project success, analysis of responses
from project managers caused the researchers to conclude that that project success means much
more than merely meeting cost schedules and performance specifications. In fact, the level of
satisfaction of the client is a very strong index of project failure or success.
Projects evaluation is a crucial task which x-rays the conformance of any given project with
international best practices and with the projects own objectives and goals. A failed project is a
drain on government funds and a waste of tax payers’ money and goodwill. It seriously limits the
ability of the government or the individual project sponsor to undertake other needed projects and
defaces the landscape. It is therefore necessary to x-ray the factors that trigger project failure as a
step towards minimizing project failure and the accompanying wastefulness.
RESEARCH METHODOLOGY
Research Design The research employed the field survey approach which took the researchers to several project
sites for the collection of data. The factors bearing on project management were analyzed to find
out their individual and collective impacts using suitable analytical tools (see Statistical analysis).
Study Population, Sample Size and Sampling Technique
One hundred 100 professionals were targeted. These included project professionals of different
backgrounds including project managers, architects, surveyors, engineers, builders, etc. The
fraction of the targeted study population responding to the questionnaire constituted the sample
size. A random sampling technique was used, targeting skilled and very experienced project
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professionals in the middle and top hierarchies.
Data Sources Data sources included both primary and secondary data sources. The primary data refers to first
hand information obtained from the surveys while the secondary data refers to already published
information which were further applied to the research. The secondary data helped establish the
theoretical background and modify the research questions and pointed out the limits of previous
researches on related topics.
Secondary data sources included:
Textbooks (print and online)
Journals articles
Real estate magazines and newspapers
Conference/Workshop papers and proceedings
Instruments for Data Collection
An Objective Evaluation Questionnaire (OEQ) was used in primary data collection. The
questionnaire was distributed to a hundred and nineteen (119) project professionals, out of which
100 was returned. This no then constituted the sample size for the analysis.
Structure of the Questionnaire
The questionnaire was structured in the "Likert-5-Point Scale of Responses" format. This has the
advantage of flexibility for several choice responses.
Additionally, the respondents were allowed to include any other factors not captured in the
questionnaire and which they deemed important towards project failure.
Primary Sources of Data
The major sources of data used in this research included Project Managers, architects, Estate
Agents, quantity surveyors, civil and structural engineers, and builders. Those included in the
sample had post-qualification experience of 5 years at the least.
In this sources of data collection, (18) factors of project failure as identified in the literature were
used in forming the questionnaire (see appendix 1).
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Factors for project failure
Table 3.2: Coding of factors responsible project failure
S/n Factors of project Implementation Code
1 The level of project collapse in Anambra State is high VA1
2 The rate of project abandonment in Anambra State is high. VA2
3 The rate of overall project failure(Cost overshoot, delayed completion,
structural collapse) in Anambra State is high
VA3
4 Spiritual factors contribute to project failure in Anambra State VA4
5 Difficult terrain,e.g. erosion, waterlogging and sticky soil, may lead to
project failure.
VA5
6 Nature of subsoil,e.g. presence of clay, causes structural failure. VA6
7 Insecurity leads to project failure VA7
8 Political pressure can result in project failure VA8
9 Use of academically qualified project managers does not result in a different
outcome from use of uneducated but experienced building contractors
VA9
10 1Increase in prices of raw materials and services leads to project failure. VA10
11 Variation of project scope leads to project failure VA11
12 Cange in original design leads to project failure. VA12
13 Poor planning of project implementation leads to project failure VA13
14 Change of project manager which may lead to change in project team leads
to project failure
VA14
15 Award of contracts without reference to funds availability leads to project
failure.
VA15
16 Frequent changes in government and government policies lead to project
failure
VA16
17 Contractors performing below expectation lead to project failure VA17
18 Scarcity of raw materials leads to project failure. VA18
Tools for data analysis
All analyses were done using SPSS. They included the following:
Factor Analysis
Factor analysis is a quantitative multivariate analysis which tries to represent the interrelationship
among a set of continuously measured variables using a number of underlying linearly-
independent reference variables called factors (Ubani & Okoroji 2013). It seeks to condense the
numerous influences into fewer dimensions of interrelated attributes called components. In this
procedure, the relative influences of different factors held by different experts to be responsible or
contributory to project failure were ranked, using Statistical Package for Social Sciences. These
included 18 factors ranked in order of importance relating to project failure. This enabled the most
important factors to be isolated, in order to help prioritize the factors affecting project
implementation in Anambra State, South East, Nigeria.
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The Correlation of Coefficient (R):
The correlation coefficient r measures the strength of correlation between quantified weight of
critical success (or failure) factors and level of successful or unsuccessful project management,
respectively.
This is calculated using the formula:
R = R2 3.1
Where:- 1 ≤ R ≤ + 1
The Paired T-test:
The T-test value is calculated using the formula:
t = 𝑑
𝑆𝑑√𝑛 3.2
Where the distribution has n-1 degree of freedom; d is the difference in mean, Sd is the standard
deviation and n is the sample size. The above formula is for illustration only and the analysis was
generated directly using SPSS.
DATA PRESENTATION AND ANALYSIS
Data presentation
One hundred responses were obtained, and their responses are presented in the weighted scores